Form 5472 Form 5472 Information return on a 25% Foreign Owned Corporation En

Form

5472

Information Return of a 25% Foreign-Owned U.S. Corporation or a
Foreign Corporation Engaged in a U.S. Trade or Business
(Under Sections 6038A and 6038C of the Internal Revenue Code)

(Rev. December 2011)
Department of the Treasury
Internal Revenue Service

Part I

For tax year of the reporting corporation beginning

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, and ending

OMB No. 1545-0805
,

Note. Enter all information in English and money items in U.S. dollars.

Reporting Corporation (see instructions). All reporting corporations must complete Part I.

1a Name of reporting corporation

1b Employer identification number
1c Total assets

Number, street, and room or suite no. (if a P.O. box, see instructions)
City or town, state, and ZIP code (if a foreign address, see instructions)
1d Principal business activity

$
1e Principal business activity code

▶

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1f Total value of gross payments made or received
(see instructions) reported on this Form 5472

1g Total number of Forms 5472
filed for the tax year

$
1i Check here if this is a 1j Country of
incorporation
consolidated filing of
Form 5472 ▶

$
1k Country(ies) under whose laws the reporting
1l Principal country(ies) where
corporation files an income tax return as a resident
business is conducted

2

1h Total value of gross payments made or received (see
instructions) reported on all Forms 5472

Check here if, at any time during the tax year, any foreign person owned, directly or indirectly, at least 50% of (a) the total voting power of all
classes of the stock of the reporting corporation entitled to vote, or (b) the total value of all classes of stock of the reporting corporation ▶

Part II

25% Foreign Shareholder (see instructions)

1a Name and address of direct 25% foreign shareholder

1c Principal country(ies) where
business is conducted

1d Country of citizenship,
organization, or incorporation

1b U.S. identifying number, if any

1e Country(ies) under whose laws the direct 25% foreign shareholder
files an income tax return as a resident

2a Name and address of direct 25% foreign shareholder

2c Principal country(ies) where
business is conducted

2d Country of citizenship,
organization, or incorporation

2b U.S. identifying number, if any

2e Country(ies) under whose laws the direct 25% foreign shareholder
files an income tax return as a resident

3a Name and address of ultimate indirect 25% foreign shareholder

3c Principal country(ies) where
business is conducted

3d Country of citizenship,
organization, or incorporation

3b U.S. identifying number, if any

3e Country(ies) under whose laws the ultimate indirect 25% foreign
shareholder files an income tax return as a resident

4a Name and address of ultimate indirect 25% foreign shareholder

4c Principal country(ies) where
business is conducted

Part III

4d Country of citizenship,
organization, or incorporation

4b U.S. identifying number, if any

4e Country(ies) under whose laws the ultimate indirect 25% foreign
shareholder files an income tax return as a resident

Related Party (see instructions)
Check applicable box: Is the related party a
foreign person or
U.S. person?
All reporting corporations must complete this question and the rest of Part III.

1a Name and address of related party

1b U.S. identifying number, if any

1d Principal business activity code ▶
1c Principal business activity ▶
1e Relationship—Check boxes that apply:
Related to 25% foreign shareholder
25% foreign shareholder
Related to reporting corporation
1f Principal country(ies) where business is conducted
1g Country(ies) under whose laws the related party files an income tax return as a
resident
For Paperwork Reduction Act Notice, see page 4.

Cat. No. 49987Y

Form

5472

(Rev. 12-2011)

Form 5472 (Rev. 12-2011)

Part IV

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If estimates are used, check here

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Sales of stock in trade (inventory)

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Sales of tangible property other than stock in trade . . .
Rents received (for other than intangible property rights) .
Royalties received (for other than intangible property rights)

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Sales, leases, licenses, etc., of intangible property rights (e.g., patents, trademarks, secret formulas) .
Consideration received for technical, managerial, engineering, construction, scientific, or like services .
Commissions received . . . . . . . . . . . . . . . . . . . . . . . .

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Amounts borrowed (see instructions)

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Interest received . . . . . . . . . .
Premiums received for insurance or reinsurance .

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Other amounts received (see instructions) . . .
Total. Combine amounts on lines 1 through 10 .
Purchases of stock in trade (inventory) . . . .

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Purchases of tangible property other than stock in trade
Rents paid (for other than intangible property rights) . .
Royalties paid (for other than intangible property rights) .

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Purchases, leases, licenses, etc., of intangible property rights (e.g., patents, trademarks, secret formulas) .
Consideration paid for technical, managerial, engineering, construction, scientific, or like services . . .
Commissions paid
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Amounts loaned (see instructions)

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Other amounts paid (see instructions) . . . .
Total. Combine amounts on lines 12 through 21

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a Beginning balance

Part VI
1
2a
b
c

b Ending balance or monthly average ▶

a Beginning balance

Interest paid . . . . . . . . . .
Premiums paid for insurance or reinsurance .

Part V

2

Monetary Transactions Between Reporting Corporations and Foreign Related Party (see instructions)
Caution: Part IV must be completed if the “foreign person” box is checked in the heading for Part III.

b Ending balance or monthly average ▶

Nonmonetary and Less-Than-Full Consideration Transactions Between the Reporting Corporation and
the Foreign Related Party (see instructions)
Describe these transactions on an attached separate sheet and check here. ▶
Additional Information
All reporting corporations must complete Part VI.

Does the reporting corporation import goods from a foreign related party? . . . . . . . . . . . . .
If “Yes,” is the basis or inventory cost of the goods valued at greater than the customs value of the imported goods?
If “No,” do not complete b and c below.
If “Yes,” attach a statement explaining the reason or reasons for such difference.
If the answers to questions 1 and 2a are “Yes,” were the documents used to support this treatment of the imported
goods in existence and available in the United States at the time of filing Form 5472? . . . . . . . . . .

General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.

What’s New
T.D. 9529, 2011-30 I.R.B. 57, removed the
duplicate filing requirement for Form 5472
contained in Regulations sections
1.6038A-2(d) and 1.6038A-2(e). See When
and Where To File on page 3 for revised filing
requirements.

Purpose of Form
Use Form 5472 to provide information
required under sections 6038A and 6038C
when reportable transactions occur during
the tax year of a reporting corporation with a
foreign or domestic related party.

Definitions
Reporting corporation. A reporting
corporation is either:
• A 25% foreign-owned U.S. corporation or

• A foreign corporation engaged in a trade or
business within the United States.
25% foreign owned. A corporation is 25%
foreign owned if it has at least one direct or
indirect 25% foreign shareholder at any time
during the tax year.
25% foreign shareholder. Generally, a
foreign person (defined on page 3) is a 25%
foreign shareholder if the person owns,
directly or indirectly, at least 25% of either:
• The total voting power of all classes of
stock entitled to vote or
• The total value of all classes of stock of the
corporation.
The constructive ownership rules of section
318 apply with the following modifications to
determine if a corporation is 25% foreign
owned. Substitute “10%” for “50%” in
section 318(a)(2)(C). Do not apply sections
318(a)(3)(A), (B), and (C) so as to consider a
U.S. person as owning stock that is owned
by a foreign person.
Related party. A related party is:
• Any direct or indirect 25% foreign
shareholder of the reporting corporation,

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Yes
Yes

No
No

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Yes

No

• Any person who is related (within the
meaning of section 267(b) or 707(b)(1)) to the
reporting corporation,
• Any person who is related (within the
meaning of section 267(b) or 707(b)(1)) to a
25% foreign shareholder of the reporting
corporation, or
• Any other person who is related to the
reporting corporation within the meaning of
section 482 and the related regulations.
“Related party” does not include any
corporation filing a consolidated Federal
income tax return with the reporting
corporation.
The rules in section 318 apply to the
definition of related party with the
modifications listed under the definition of
25% foreign shareholder above.
Reportable transaction. A reportable
transaction is:
• Any type of transaction listed in Part IV (e.g.,
sales, rents, etc.) for which monetary
consideration (including U.S. and foreign
currency) was the sole consideration paid or
received during the reporting corporation’s
tax year or

Form 5472 (Rev. 12-2011)

• Any transaction or group of transactions
listed in Part IV, if:
1. Any part of the consideration paid or
received was not monetary consideration or
2. Less than full consideration was paid or
received.
Transactions with a U.S. related party,
however, are not required to be specifically
identified in Parts IV and V.
Direct 25% foreign shareholder. A foreign
person is a direct 25% foreign shareholder if it
owns directly at least 25% of the stock of the
reporting corporation by vote or value.
Ultimate indirect 25% foreign shareholder.
An ultimate indirect 25% foreign shareholder
is a 25% foreign shareholder whose
ownership of stock of the reporting
corporation is not attributed (under the
principles of section 958(a)(1) and (2)) to any
other 25% foreign shareholder. See Rev.
Proc. 91-55, 1991-2 C.B. 784.
Foreign person. A foreign person is:
• An individual who is not a citizen or resident
of the United States,
• An individual who is a citizen or resident of a
U.S. possession who is not otherwise a
citizen or resident of the United States,
• Any partnership, association, company, or
corporation that is not created or organized in
the United States,
• Any foreign estate or foreign trust described
in section 7701(a)(31), or
• Any foreign government (or agency or
instrumentality thereof) to the extent that the
foreign government is engaged in the
conduct of a commercial activity as defined
in section 892.
However, the term “foreign person” does
not include any foreign person who consents
to the filing of a joint income tax return.

Who Must File
Generally, a reporting corporation must file
Form 5472 if it had a reportable transaction
with a foreign or domestic related party.
Exceptions from filing. A reporting
corporation is not required to file Form 5472
if any of the following apply:
1. It had no reportable transactions of the
types listed in Parts IV and V of the form.
2. A U.S. person that controls the foreign
related corporation files Form 5471,
Information Return of U.S. Persons With
Respect To Certain Foreign Corporations, for
the tax year to report information under
section 6038. To qualify for this exception, the
U.S. person must complete Schedule M
(Form 5471), Transactions Between
Controlled Foreign Corporations and
Shareholders or Other Related Persons,
showing all reportable transactions between
the reporting corporation and the related
party for the tax year.
3. The related corporation qualifies as a
foreign sales corporation for the tax year and
files Form 1120-FSC, U.S. Income Tax
Return of a Foreign Sales Corporation.
4. It is a foreign corporation that does not
have a permanent establishment in the
United States under an applicable income tax
treaty and timely files Form 8833,
Treaty-Based Return Position Disclosure
Under Section 6114 or 7701(b).

Page

5. It is a foreign corporation all of whose
gross income is exempt from taxation under
section 883 and it timely and fully complies
with the reporting requirements of sections
883 and 887.
6. Both the reporting corporation and the
related party are not U.S. persons as defined
in section 7701(a)(30) and the transactions
will not generate in any tax year:
• Gross income from sources within the
United States or income effectively
connected, or treated as effectively
connected, with the conduct of a trade or
business within the United States or
• Any expense, loss, or other deduction that
is allocable or apportionable to such income.
Consolidated returns. If a reporting
corporation is a member of an affiliated
group filing a consolidated income tax return,
Regulations section 1.6038A-2 may be
satisfied by filing a U.S. consolidated Form
5472. The common parent must attach to
Form 5472 a schedule stating which
members of the U.S. affiliated group are
reporting corporations under section 6038A,
and which of those members are joining in
the consolidated filing of Form 5472. The
schedule must show the name, address, and
employer identification number of each
member who is including transactions on the
consolidated Form 5472.
Note. A member is not required to join in
filing a consolidated Form 5472 just because
the other members of the group choose to
file one or more Forms 5472 on a
consolidated basis.

When and Where To File
Attach Form 5472 to the reporting
corporation's income tax return. If the
reporting corporation's income tax return is
not filed when due, file a timely Form 5472
separately with the service center where the
reporting corporation's income tax return is
due. When the reporting corporation's tax
return is filed, attach a copy of the previously
filed Form 5472.
Note. A separate Form 5472 must be filed for
each foreign or domestic related party with
which the reporting corporation had a
reportable transaction during the tax year.

Electronic Filing of Form 5472
If you file your income tax return
electronically, see the instructions for your
income tax return for general information
about electronic filing.

Accrued Payments and Receipts
A reporting corporation that uses an accrual
method of accounting must use accrued
payments and accrued receipts for purposes
of computing the total amount to enter on
each line of the Form 5472. See Regulations
section 1.6038A-2(b)(8).

Penalties
Penalties for failure to file Form 5472. A
penalty of $10,000 will be assessed on any
reporting corporation that fails to file Form
5472 when due and in the manner
prescribed. The penalty also applies for
failure to maintain records as required by
Regulations section 1.6038A-3.

3

Note. Filing a substantially incomplete Form
5472 constitutes a failure to file Form 5472.
Each member of a group of corporations
filing a consolidated information return is a
separate reporting corporation subject to a
separate $10,000 penalty and each member
is jointly and severally liable.
If the failure continues for more than 90
days after notification by the IRS, an
additional penalty of $10,000 will apply. This
penalty applies with respect to each related
party for which a failure occurs for each 30day period (or part of a 30-day period) during
which the failure continues after the 90-day
period ends.
Criminal penalties under sections 7203,
7206, and 7207 may also apply for failure to
submit information or for filing false or
fraudulent information.

Record Maintenance
Requirements
A reporting corporation must keep the
permanent books of account or records as
required by section 6001. These books must
be sufficient to establish the correctness of
the reporting corporation’s Federal income
tax return, including information or records
that might be relevant to determine the
correct treatment of transactions with related
parties. See Regulations section 1.6038A-3
for more detailed information. Also, see
Regulations sections 1.6038A-1(h) and
1.6038A-1(i) for special rules that apply to
small corporations and reporting
corporations with related party transactions of
de minimis value.

Specific Instructions
Part I
Line 1a. Address. Include the suite, room, or
other unit number after the street address. If
the Post Office does not deliver mail to the
street address and the corporation has a P.O.
box, show the box number instead.
Foreign address. Enter the information in
the following order: city, province or state,
and country. Follow the country’s practice for
entering the postal code, if any. Do not
abbreviate the country name.
Line 1c. Total assets. Domestic reporting
corporations enter the total assets from item
D, page 1, Form 1120. Foreign reporting
corporations enter the amount from line 17,
column (d), Schedule L, Form 1120-F.
Lines 1d and 1e. Enter a description of the
principal business activity and enter the
principal business activity code. See the
Instructions for Form 1120 or Form 1120-F
for a list of principal business activities and
their associated codes.
Line 1f. Enter the total value in U.S. dollars of
all foreign related party transactions reported
in Parts IV and V of this Form 5472. This is
the total of the amounts entered on lines 11
and 22 of Part IV plus the fair market value of
the nonmonetary and less-than-full
consideration transactions reported in Part V.
Do not complete line 1f if the reportable
transaction is with a U.S. related party.

Form 5472 (Rev. 12-2011)

Line 1g. File a separate Form 5472 for each
foreign or each U.S. person who is a related
party with which the reporting corporation
had a reportable transaction. Enter the total
number of Forms 5472 (including this one)
being filed for the tax year.
Line 1h. Enter the total value in U.S. dollars
of all foreign related party transactions
reported in Parts IV and V of all Forms 5472
filed for the tax year. This is the total of the
amounts entered on line 1f of all Forms 5472
filed for the tax year (including this one).
Line 1l. Provide the principal country(ies)
where business is conducted. Do not
include a country(ies) in which business is
conducted solely through a subsidiary. Do
not enter “worldwide” instead of listing the
country(ies). These rules also apply to lines
2c, 3c, 4c, Part II, and line 1f, Part III.
Line 2. For purposes of this line:
• “Foreign person” has the same meaning as
provided on page 3.
• 50% direct or indirect ownership is
determined by applying the constructive
ownership rules of section 318 with the
modifications listed under 25% foreign
shareholder on page 2.

Part II
Note. Only 25% foreign-owned U.S.
corporations complete Part II.
The form provides sufficient space to
report information for two direct 25% foreign
shareholders and two ultimate indirect 25%
foreign shareholders. If more space is
needed, show the information requested in
Part II on an attached sheet.
Report on lines 1a through 1e information
about the direct 25% foreign shareholder who
owns (by vote or value) the largest
percentage of the stock of the U.S. reporting
corporation.
Report on lines 2a through 2e information
about the direct 25% foreign shareholder who
owns (by vote or value) the second-largest
percentage of the stock of the U.S. reporting
corporation.
Report on lines 3a through 3e information
about the ultimate indirect 25% foreign
shareholder who owns (by vote or value) the
largest percentage of the stock of the U.S.
reporting corporation.
Report on lines 4a through 4e information
about the ultimate indirect 25% foreign
shareholder who owns (by vote or value) the
second-largest percentage of the stock of the
U.S. reporting corporation.
Lines 3a through 3e and lines 4a through
4e. Attach an explanation of the attribution
of ownership. See Rev. Proc. 91-55 and
Regulations section 1.6038A-1(e).

Part III
All filers must complete Part III even if the
related party has been identified in Part II as
a 25% foreign shareholder. Report in Part III
information about the related party (domestic
or foreign) with which the reporting
corporation had reportable transactions
during the tax year.

Page

Part IV
Note. Do not complete Part IV for
transactions with a domestic related party.
When completing Part IV or Part V, the
terms “paid” and “received” include accrued
payments and accrued receipts. State all
amounts in U.S. dollars and attach a
schedule showing the exchange rates used.
If the related party transactions occur
between a related party and a partnership
that is, in whole or in part, owned by a
reporting corporation, the reporting
corporation reports only the percentage of
the value of the transaction(s) equal to the
percentage of its partnership interest. This
rule does not apply if the reporting
corporation owns a less-than-25% interest in
the partnership. The rules of attribution apply
when determining the reporting corporation’s
percentage of partnership interest.
Generally, all reportable transactions
between the reporting corporation and a
related foreign party must be entered in Part
IV.
Reasonable estimates. When actual
amounts are not determinable, enter
reasonable estimates (see below) of the total
dollar amount of each of the categories of
transactions conducted between the reporting
corporation and the related person in which
monetary consideration (U.S. currency or
foreign currency) was the sole consideration
paid or received during the tax year of the
reporting corporation.
A reasonable estimate is any amount
reported on Form 5472 that is at least 75%
but not more than 125% of the actual amount
required to be reported.
Small amounts. If any actual amount in a
transaction or a series of transactions
between a foreign related party and the
reporting corporation does not exceed a total
of $50,000, the amount may be reported as
“$50,000 or less.”
Line 7. Amounts borrowed. Report amounts
borrowed using either the outstanding
balance method or the monthly average
method. If the outstanding balance method is
used, enter the beginning and ending
outstanding balance for the tax year on lines
7a and 7b. If the monthly average method is
used, skip line 7a and enter the monthly
average for the tax year on line 7b.
Line 10. Other amounts received. Enter
amounts received that are not specifically
reported on lines 1 through 9. Include
amounts on line 10 to the extent that these
amounts are taken into account in
determining the taxable income of the
reporting corporation.
Line 18. Amounts loaned. Report amounts
loaned using either the outstanding balance
method or the monthly average method. If the
outstanding balance method is used, enter
the beginning and ending outstanding
balance for the tax year on lines 18a and 18b.
If the monthly average method is used, skip
line 18a and enter the monthly average for
the tax year on line 18b.
Line 21. Other amounts paid. Enter
amounts paid that are not specifically
reported on lines 12 through 20. Include
amounts on line 21 to the extent that these

4

amounts are taken into account in
determining the taxable income of the
reporting corporation.

Part V
Note. Do not complete Part V for
transactions with a domestic related party.
If the related party is a foreign person, the
reporting corporation must attach a schedule
describing each reportable transaction, or
group of reportable transactions. The
description must include sufficient information
so that the nature and approximate monetary
value of the transaction or group of
transactions can be determined. The
schedule should include:
1. A description of all property (including
monetary consideration), rights, or obligations
transferred from the reporting corporation to
the foreign related party and from the foreign
related party to the reporting corporation;
2. A description of all services performed
by the reporting corporation for the foreign
related party and by the foreign related party
for the reporting corporation; and
3. A reasonable estimate of the fair market
value of all properties and services
exchanged, if possible, or some other
reasonable indicator of value.
If the entire consideration received for any
transaction includes both tangible and
intangible property and the consideration paid
is solely monetary consideration, report the
transaction in Part IV instead of Part V if the
intangible property was related and incidental
to the transfer of the tangible property (e.g., a
right to warranty services).
See the instructions for Part IV for
information on reasonable estimates and
small amounts.
Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States. You are required to give us the
information. We need it to ensure that you are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long as
their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information
are confidential, as required by section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time
is:
Recordkeeping . . . . 17 hr., 42 min.
Learning about the law
or the form . . . . . . 3 hr., 4 min.
Preparing and sending
the form to the IRS . .
3 hr., 30 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler, we
would be happy to hear from you. See the
instructions for the tax return with which this
form is filed.